Crypto market update: From $6 to 40 Cents, What Really Caused the Mantra Token Meltdown?

In a shocking turn of events, Mantra’s OM token crashed over 90% within just one hour on Sunday, plummeting from nearly $6 to below $0.40 and sending waves of panic across the crypto community.

Billions of dollars were wiped off the map in minutes.

Was this a rug pull? An insider dump? Or a case of reckless liquidations gone horribly wrong?

According to the Mantra team, they had nothing to do with the crash. But investors aren’t convinced. The timing, the silence, and the suddenness of the drop have all raised serious red flags.

A Sudden Crash with No Warning

John Patrick Mullin, co-founder of Mantra, quickly addressed the chaos, blaming the implosion on “forced exchange liquidations during a low-liquidity period.” On X, he claimed that user positions were closed without margin calls or notice, triggering a fast and brutal cascade.

In a separate official statement, the team described it as “reckless liquidations” that spiralled out of control—hinting at exchange practices rather than internal wrongdoing.

But for holders who watched their portfolios evaporate in real time, that explanation feels thin. The token dropped to as low as $0.37 before rebounding to around $0.80. That’s still a staggering 90% drop from its February peak of $8.99.

Real-World Impact on RWA Confidence

This isn’t just about one token crash. Mantra is a major player in the real-world asset (RWA) tokenization space—built using the Cosmos SDK, supporting IBC, and designed for cross-chain compliance.

Its partnerships with giants like Google Cloud and Dubai’s DAMAC Group once positioned it as a serious contender in the tokenized asset world.

But now? All of that is in question.

A blow this severe could damage more than Mantra’s price. It risks shaking institutional confidence in the entire RWA sector. Hank Huang, CEO of Kronos Research, called the event a “critical moment,” adding that it shows how early—and unstable—the tokenized asset space still is.

Not a Rug Pull… But Not Quite Innocent?

The Mantra team has firmly denied any “rug pull” accusations. On-chain data shows the team’s token allocation is still locked. No evidence suggests insider dumping. In fact, Arkham Intelligence reported that 21 million OM tokens were burned on April 2—seemingly a bullish move.

Still, the lack of communication, the timing during low liquidity hours, and the magnitude of the crash have triggered an industry-wide debate on centralized exchange risks.

Forced liquidations—automated sell-offs when a position falls below maintenance levels—can spiral out of control fast. However, critics argue that exchanges should have guardrails in place to prevent such volatility from wiping out entire markets.

Conclusion: Can Mantra Regain Trust?

Whether this was a technical flaw, centralized mismanagement, or just a perfect storm of bad timing and bad liquidity, one thing is clear: Mantra now faces a massive trust crisis.

As Mullin put it, “When discretionary powers are exercised without due oversight, dislocations like this will occur.” And they did—spectacularly.

Now the question is: can Mantra rise from the ashes? Or is this crash the beginning of the end for one of RWA’s most ambitious projects?

Investors are watching closely.